FinTech in China: The front runner in the digital economy era

By Ellie Lin

China is, in many respects, one of the world leaders in the fintech industry; accounting for 500 million fintech users. Third party payment transactions hit 155 trillion RMB (22 trillion USD), among which mobile payment and online payment accounted for over 80 percent. The largest Chinese fintech company, Ant Financial, is expected to value the company at about $150bn, which would make it the world’s 86th-biggest company by market capitalisation and the world’s next biggest “hectocorn”. Fintech in China has been developing at a rapid pace with an outburst of innovations and startups.

Cryptocurrency, blockchain finance, robot advice service, crowdfunding, and P2P lending. We can see that there are many different types of new technology which have been used to solve real-world problems in our everyday lives.

What does Chinese Fintech look like?
The explosion in online and mobile penetration has created a fertile ground for financial services to grow. Purchasing is really easy with Alipay or WeChat pay (mobile payment), from high-end products to street food, no matter where you are, city centre to countryside. As long as you are with your smartphone, every transaction can be done within one second, simply by scanning the merchant’s QR code with your mobile.

The daily lives of consumers have been fully penetrated by their ubiquitous service and extensive ecosystems. Those Chinese internet giants like Baidu, Alibaba, and Tencent (BAT) have disrupted traditional finance industry. They can easily collect massive amounts of data with high consumer usage, which provides them with an advantage to predict consumer behavior before offering more innovative products

The biggest improvement in 2018 so far?
Ant Financial launched a blockchain-powered cash remittance service to offer easier and cheaper international money transfers for its AlipayHK wallet last month.
This service is currently available between Hong Kong and the Philippines, which is the first of its kind globally, according to Ant Financial.
The remittance service was dominated by traditional banks, it charges a high transaction fee and takes a long time to process. Now, the collaboration of Alipay and GCash use financial technology to provide more efficient and affordable financial services to users. International transactions can be done within seconds.

Blockchain has created a myriad of possibilities in our daily life, both in the West and the East. Jack Ma, the co-founder of Alibaba said: “The impact of blockchain to people and society will be greater than we can ever imagine.”